Tesla's Affordable Car to Be Unveiled in 2015?

The details are scant, but Tesla (NASDAQ: TSLA) CEO Elon Musk has not kept everything a secret. And now Tesla's automobile designer, Franz von Holzhausen has revealed some new elements to Tesla's plan for its more affordable all-electric vehicle. Most importantly, he suggests that it won't be too long before the world gets to see Tesla's highly anticipated vehicle built for the masses.

The time frameThe typical time frame Tesla mentions when it talks about the launch of its affordable all-electric car, often referred to as its "gen-III" vehicle, ranges between 2016 and 2017. In a Sept. 14 corporate presentation, Tesla put it in virtual ink in one of the company slides: the third-generation platform, producing in higher volume at a lower price, was portrayed on the company's "Unit Growth Roadmap" timetable under the 2016 to 2017 time frame.

Franz comments seem to confirm this time frame. In his interview with AutoBild, Franz said that Tesla will "probably" remove the wraps from its more affordable car at the 2015 Detroit auto show. The early unveil shouldn't be a surprise. Even though Tesla didn't start shipping the Model S until the first quarter of 2013, it showed off an early Model S body in 2011 and a production-ready version in early 2012. That said, Franz comment suggests that Tesla is on schedule with its timetable for the vehicle.

The detailsFranz revealed a few other details. Confirming rumors, he told AutoBild that the car will be referred to as the Model E. Furthermore, Musk has previously said the Model E would be smaller than the Model S; but apparently it won't be much smaller. According to Franz, it's going to be about the same size.

The other details of the car Musk and company have mentioned in the past include pricing at about $30,000-$35,000 and an all-electric range at more than 200 miles. Most importantly, and why the project is followed so closely, Musk has said that when the company ships its lower-cost vehicle it wants to be producing a couple hundred thousand cars per year -- far higher than Tesla's current rate of just over 20,000 vehicles per year.

Can the Model E live up to expectations? Up until this point, Tesla has been supply limited. In fact, Tesla has demand that exceeds supply enough that the company hasn't spent a dime on advertising for the Model S, according to Tesla's third-quarter letter to shareholders. So the company's forecast to reach a level of annualized sales for the Model S in 2014 that could exceed 40,000 definitely seems achievable -- especially as the company expands internationally. But imagining a rate of hundreds of thousands per year by 2016 is another story.

Model S.

Will Tesla's Model E live up to the hype? If history is any indication of what's to come for Tesla, the company may deliver on its promise. At the close of this year, Tesla is on pace to live up to an early 2011 prediction by CEO Elon Musk to sell 20,000 vehicles during the first 12 months of Model S deliveries. At the time, that sounded crazy. But today Tesla is on pace to surpass that goal.

As the details on the Model E began to surface and the time for its launch draws closer, Tesla's bullish predictions for the vehicle are more believable than ever. Unfortunately, however, the likely success of the Model E is already mostly priced into the stock. But as a Tesla shareholder myself, the massive opportunity is a comforting thought; for a Foolish investor who plans to hold shares over the long haul, the Model E is a representation of Tesla as an enduring, major player in the auto market -- a reason to hold for the long haul.

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How are they in the snow in North Dakota? Wisconsin? New York, New England? What does the salt do to the aluminum frame and batteries. How long before they rot out in Michingan? How many have 200,000 miles on them. How many have lasted ten years or longer? These are questions that need to be asked before buying this vehicle.

Daniel, thanks for the article... led me to read the original article in Autobild.

One point I think needs to be clarified, Franz did not describe any change to the planned size of the Gen III car; that is, as previously described, it will be smaller than the Model S.

Perhaps you were passed on a poor translation. Link is below, and here is how I read the comments... Franz said the car would not be a small Model S, as in, not the same exact design simply scaled down (he gives Audi's cars as an example of that approach), but rather a new design of its own.

Here's the link to the article. fwiw, I was able to get a translation by accessing it through google.

Ostritch, Elon is fond of responding to the cold weather questions by reminding people that the highest per capita location of Tesla's is in Norway. In fact, their biggest customer (has purchased a dozen or so) lives above the arctic circle!

As to durability over miles and time... obviously a year into Model S no real world data is a fair point. In theory, the far simpler design than an ICE car looks good, the motor may well last hundreds of thousands of miles. Five years in on Roadster launch battery durability as been above Tesla's estimates for that car:

Of course, it's worth noting, the projections that Tesla made for the Roadster battery at it's launch were lower than those for Model S. Tesla did not simply put a larger Roadster battery into the Model S.

The all aluminum chassis Audi A8 handles the salt and snow of Northern Europe and North America just fine and has been doing so since 1994.That is just about 20 years. Like the A8, the Model S aluminum chassis was co-developed with Alcoa.

Proof for the Model S over 10-20 years is for late and last adopters, in other words the hyper risk averse.

Early, second, and third generation adopters are fine with specifications, preliminary data, and early data.

If you don't want to buy an electric car until the government bans internal combustion engine cars that is cool. There are plenty of potential Tesla buyers to keep the company's sales growing at double digits and even triple digits for the foreseeable future.

Count me in as a New Englander planning to buy some shares of Tesla over time, and then cash in a couple shares to buy me the real deal Gen III Telsa - it's like a perpetual motion machine, duuude! Keep it going forever!

Sending report...

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